A few weeks ago, newspapers, magazines and other publications competed with each other to give the most dire and depressingview on the US economy. In short, we were supposed to be heading towards a recession as bad as the 1930s depression, if notworse…. However, recent data, whether it be on employment, inventories, corporate profits or domestic consumption have allcome out surprisingly strong (yesterday, retail sales rose by a stronger-than-expected +0.5% MoM and business sales gained+1.0% MoM). In fact, so far this month, in our overview of major economic data, US numbers have surprised on the upside tentimes, versus three disappointments . While we are most definitely in a mid-cycle slowdown, we may yet avoid arecession. In fact, given the trade numbers that came out on Friday of last week, we would not be surprised to see the 1Q GDPgrowth get an upwards revision. In addition, the many simulative measures by both the Fed and the Treasury are only nowstarting to impact the economy.

SNE Sony beats by $0.13, beats on revs; forecast a bigger-than-expected profit for fiscal 2009 (46.06 ) Reports Q4 (Mar) earnings of $0.28 per share, $0.13 better than the First Call consensus of $0.15; revenues rose 10.3% year/year to $19.53 bln vs the $19.22 bln consensus. Reuters reported that Sony Corporation forecast a bigger-than-expected profit for fiscal 2009 and expects operating profit to grow 20% to JPY450 billion and sees revenues rising 1% to JPY9 trillion. According to Reuters Estimates, analysts were expecting the Company to report operating profit of JPY431 billion and revenue of JPY9.15 trillion for the same period. The Company cited the boost in sales of digital cameras and flat TVs, as the primary reason for the profit outlook.

As I grow older, I pay less attention to what men say. I just watch what they do. -- Andrew Carnegie

The bulls tell us that the worst is over, the recession (if we have one) will be mild, the dollar will strengthen, commodity prices will moderate and inflationary pressures will cool. The bears tell us there is another shoe to drop, we haven't seen the end of the woes in the banking system, the housing market has more downside and market players are way too sanguine about the problems we face.

So who is right? We all have our opinions, and we believe that our insight into what lies ahead is not only reasonable but likely. Unfortunately, that doesn't make for a very good investing approach.

Profitable investing is more about managing risk than it is about making predictions about the economy. While we may want to formulate theories on how events will unfold, we must never take our eye off the action in front of us. There is no doubt that no matter what happens in the market, the bulls will still be bullish and the bears still will still be bearish. There is never a shortage of great arguments for both sides of the market.

So what we do is watch the action. It doesn't much matter what the pundits are saying if stocks are trending in the opposite direction and ignoring their wisdom. The price action will always be far more informative and insightful than the views of any pundit or market expert. We need to stay focused on that and not be overly influenced by the siren call of intellectual arguments.

Right now, the uptrend is still intact. There are some cracks appearing and things are a bit extended, but the market is not yet rolling over. Intellectually I believe quite strongly that there is some fairly significant downside coming soon, but I have to wait until there is price action to back up my thinking. If I simply act on my theories at this point, I will be making a very risky more. I need to manage my risk by reacting to the market rather than trying to predict it.

It is very tricky out there right now with oil prices and the dollar whipping us and lots of debate over the degree to which we will suffer a recession and whether or not the worst is over. I am a skeptic, but I'm sticking with the long-side plays until I have some solid proof that I shouldn't.

MacRumors reports according to ZDNet.de, INTC Manager Hannes Schwaderer confirmed that AAPL would be using the Intel Atom processor in a future version of the iPhone. The new model will reportedly be a larger model with a 720x480 pixel display, correlating with circulating rumors about a mini-tablet device rumored to be coming from Apple. He goes on to say that an upgraded version of the current form factor of iPhone would also exist as a 3G-model. While Schwaderer calls the larger device a "version of the iPhone", it seems clear that it refers to the rumored mini-tablet device. Some rumors have suggested that it would be introduced at WWDC.